Takeover Group Makes Final Dell Offer as Icahn Looms

Written by: Antoine Gara08/02/13 - 4:10 PM EDT

Tickers in this article:
DELL

Updated from 10:02 a.m. ET with Carl Icahn comment .

NEW YORK ( TheStreet) -- Dell's takeover by founder Michael Dell and private equity firm Silver Lake Partners is back on track after the buyout consortium made a slight increase to their $24.4 billion offer and won significant concessions from the company's board of directors.

Michael Dell and Silver Lake are now offering shareholders an extra 10-cents to their initial $13.65 a share takeover offer and will also pay out a 13-cent special dividend if shareholders accept their bid.

The new offer comes with big changes to Dell's near six-month takeover. A shareholder vote scheduled for later Friday will be adjourned until Sept.12 and the record date on the vote will be changed to August 13.

More importantly, a special committee tasked with maintaining fairness in the process of the struggling PC-maker's takeover has caved to the buyout consortium's demands.

In late July, Silver Lake and Michael Dell asked that, along with a bid increase, Dell's special committee agreed to revise its merger agreement so absentee votes at the shareholder meeting aren't counted against the takeover consortium.

The special committee had refused such demands earlier in the week, however, Silver Lake's 13-cent special dividend may have changed its mind. Dell will also pay out its 8-cent quarterly dividend and the company has agreed to significantly reduce a breakup fee on the takeover.

"The Committee is pleased to have negotiated this transaction, which provides as much as $470 million of increased value, including the next quarterly dividend that will now be paid regardless of when the transaction closes," Alex Mandl, Chairman of the special committee said in a statement.

While subtle, a changed record date and merger agreement could allow the buyout consortium to finally win over undecided voters in the buyout process. Absentee voters, who counted against their offer, now won't count at all.

The move indicates the takeover consortium may finally win control of Dell, amid fierce opposition from billionaire activist investor Carl Icahn, who is offering shareholders a $14 a share self-tender for about 72% of Dell's shares.

In July, Icahn said he would add a warrant to his tender offer for the majority shares. The warrant, which Icahn says is worth up to $4 a share to current investors, will give Dell shareholders the right to buy one Dell share within the next seven years for every four shares they tender to his offer.

Icahn said earlier in August he would sue Dell if it changes the record date on its buyout vote. Given a smaller breakup fee and the need to now convince more shareholders to vote against Dell's takeover, the activist may have to consider new changes to his competing takeover efforts.